0001144204-15-026600.txt : 20150430 0001144204-15-026600.hdr.sgml : 20150430 20150430163928 ACCESSION NUMBER: 0001144204-15-026600 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20150430 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150430 DATE AS OF CHANGE: 20150430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAY BANKS OF VIRGINIA INC CENTRAL INDEX KEY: 0001034594 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 541838100 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22955 FILM NUMBER: 15819419 BUSINESS ADDRESS: STREET 1: 100 S MAIN STREET CITY: KILMARNICK STATE: VA ZIP: 22482 BUSINESS PHONE: 8044351171 MAIL ADDRESS: STREET 1: 100 S MAIN STREET CITY: KILMARNOCK STATE: VA ZIP: 22482 8-K 1 v409008_8k.htm FORM 8-K

 

 

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of report (Date of earliest event reported): April 30, 2015

 

 

 

BAY BANKS OF VIRGINIA, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

     
Virginia 0-22955 54-1838100

(State or Other Jurisdiction

of Incorporation)

 

 (Commission File Number)

(IRS Employer

Identification No.) 

 

100 S. Main Street, Kilmarnock, Virginia 22482

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (804) 435-1171

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02Results of Operations and Financial Condition.

 

On April 30, 2015, Bay Banks of Virginia, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2015.

 

A copy of the Company’s press release is attached and furnished herewith as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits.

 

Exhibit No.   Description
99.1   Press release, dated April 30, 2015, announcing the Company’s financial results for the quarter ended March 31, 2015.

  

2
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  BAY BANKS OF VIRGINIA, INC.  
       
  By: /s/ Deborah M. Evans  
  Deborah M. Evans

 
  Chief Financial Officer  
       
April 30, 2015      

 

3
 

 

EXHIBIT INDEX

 

Exhibit No.   Description
99.1   Press release, dated April 30, 2015, announcing the Company’s financial results for the quarter ended March 31, 2015.

 

 

 EX-99.1 2 v409008_ex99-1.htm EXHIBIT 99.1

Bay Banks of Virginia, Inc. Reports First Quarter Earnings

KILMARNOCK, Va., April 30, 2015 /PRNewswire/ -- Bay Banks of Virginia, Inc. (OTCQB: BAYK), holding company for Bank of Lancaster and Bay Trust Company, reported earnings of $381,000 for the quarter ended March 31, 2015 compared to $460,000 for the same quarter in 2014.

"In March we opened our second full service retail branch in the Richmond, Virginia market," said Randal R. Greene, President and Chief Executive Officer. He continued, "This is in addition to our loan production office, for a total of three offices in the Metro Richmond area. Bank of Lancaster has been extremely well received by the Richmond Community and we look forward to continued growth in this dynamic market. As of March 31, 2015, total assets have grown to $394 million, loans to $304 million and deposits to $309 million."

  • Total assets grew by $3.1 million, or 0.8%, during the first quarter.
  • The Bank's deposits grew by $1.3 million, or 0.4%, during the first quarter.
  • The Bank's loans grew by $5.7 million, or 1.9%, during the first quarter.  The portfolio of loans serviced for Fannie Mae grew by $1.4 million during the first quarter to $66.1 million.
  • Earnings for the first quarter of 2015 were $0.08 per share compared to $0.10 for the first quarter of 2014. 
  • The first quarter's net interest margin was 3.70% compared to 3.85% for the prior quarter and 3.81% for the first quarter of 2014. 
  • Annualized return on average assets was 0.39% for the quarter ended March 31, 2015 compared to 0.56% for the same quarter of 2014.

HIGHLIGHTS

Net income for the first quarter of 2015:

  • Net interest income improved by 2.20%, or $71,000, on a linked-quarter basis and by 18.06%, or $505,000, compared to the first quarter of 2014.
  • Provision for loan losses decreased by $94,000 on a linked-quarter basis, and by $100,000 compared to the first quarter of 2014, to $65,000.
  • Noninterest income increased by $11,000 on a linked-quarter basis, and decreased 20.5%, or $228,000, compared to the first quarter of 2014.
  • Noninterest expense increased $479,000 on a linked-quarter basis, and increased by 17.3%, or $537,000, compared to the first quarter of 2014.

Asset quality continues to improve:

  • Total classified assets decreased by $209,000 on a linked-quarter basis, to $8.8 million, and declined by $986,000 compared to March 31, 2014.
  • Total classified assets declined to 21.0% of tier 1 capital plus the allowance as of March 31, 2015, compared to 21.7% for the prior quarter-end and 24.6% as of March 31, 2014.
  • Nonperforming assets increased by $1.2 million on a linked-quarter basis, to $5.9 million, and increased by $73,000, or 1.2%, compared to March 31, 2014.
  • Nonperforming assets as a percent of total assets were 1.51% as of March 31, 2015, compared to 1.78% as of March 31, 2014.
  • Annualized net loan charge-offs as a percent of average loans declined to 0.03% during the first quarter compared to 0.22% during the first quarter of 2014.
  • Allowance for loan losses was unchanged at 1.07% of loans from the prior quarter and down from 1.16% at March 31, 2014. 
  • Coverage of loan loss reserves to non-performing loans decreased to 102.1% as of March 31, 2015, compared to 162.9% at the prior quarter end and 126.5% at March 31, 2014.

Net interest margin:

  • Net interest margin decreased to 3.70% this quarter compared to 3.85% on a linked-quarter basis and 3.81% for the first quarter of 2014.
  • Yield on earning assets decreased to 4.36% this quarter compared to 4.50% on a linked-quarter basis and 4.56% for the first quarter of 2014.
  • Cost of funds was 0.69% this quarter compared to 0.68% on a linked-quarter basis and 0.78% for the first quarter of 2014.

Capital levels remained solid:

  • Tangible common equity as a percent of tangible assets increased to 9.62% from 9.56% on a linked-quarter basis, and decreased from 10.92% at March 31, 2014.
  • Tier 1 leverage ratio decreased to 9.88% this quarter compared to 10.36% last quarter.

FIRST QUARTER 2015 COMPARED TO FIRST QUARTER 2014

Net Interest Income

Net interest income for the first quarter of 2015 increased $505,000, or 18.1%, compared to the first quarter of 2014. This improvement was attributed to a $548,000 increase in interest income driven primarily by loan growth, which offset a reduced net interest margin. Interest expense increased by $43,000 due to growth in money market deposit accounts in the Richmond market.

Non-Interest Income

Non-interest income for the three months ended March 31, 2015 decreased $228,000, or 20.5%, compared to the three months ended March 31, 2014. This decrease was primarily the result of a gains recognized in 2014 of $138,000 on the sale of a former branch and $30,000 on the sale of OREO, plus a loss of $39,000 in 2015 on the sale of OREO.

Non-Interest Expense

For the three months ended March 31, 2015 and 2014, non-interest expense totaled $3.6 million and $3.1 million, respectively. The increase of $537,000 was primarily related to an increase of $461,000 in salaries and benefits and an increase of $77,000 in occupancy expense. Compared to the first quarter of 2014, the salaries and benefits increase is due to 13 additional full-time equivalent employees related to the Richmond market growth, as is the increase in occupancy expense.

BALANCE SHEET

Total assets increased $3.1 million, or 0.8%, to $393.6 million during the first quarter of 2015. This was primarily due to loan growth. On the liability side of the balance sheet for the same time frame, deposits grew by $1.3 million, or 0.4%. Capital increased by $518,000 due to improved earnings, net of reductions in accumulated other comprehensive losses, partially offset by the buyback of 15,000 shares of common stock.

ASSET QUALITY

During 2015, non-performing assets, excluding troubled debt restructures (TDRs) increased by $1.2 million to $5.9 million, or 1.51% of assets, due to one large relationship which was placed on nonaccrual. Classified assets decreased by $209,000 during the same period to $8.8 million, or 21.0% of tier 1 capital plus the allowance for loan losses.

For additional details on the Company's financial results, please refer to the Selected Financial Data attached.

About Bay Banks of Virginia, Inc.

Bay Banks of Virginia, Inc. is the bank holding company for Bank of Lancaster and Bay Trust Company. Founded in 1930, Bank of Lancaster is a state-chartered community bank headquartered in Kilmarnock, Virginia. With eight banking offices located throughout the Northern Neck region, a residential lending production office in Middlesex County, and three banking offices in Richmond, Virginia, the bank serves businesses, professionals and consumers with a wide variety of financial services, including retail and commercial banking, investment services, and mortgage banking. Bay Trust Company provides management services for personal and corporate trusts, including estate planning, estate settlement and trust administration.

For further information, contact Randal R. Greene, President and Chief Executive Officer, at 800-435-1140 or inquiries@baybanks.com.

This report contains statements concerning the Company's expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute "forward-looking statements" as defined by federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, changes in interest rates, general economic conditions, the legislative/regularity climate, monetary and fiscal policies of the U. S. Government, including policies of the U. S. Treasury and Federal Reserve Board, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area, acquisitions and dispositions, and accounting principles, polices and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made.

Selected Financial Data










Quarters ended:

3/31/2015

12/31/2014

9/30/2014

6/30/2014

3/31/2014

(in thousands except for per share and share amounts)



BALANCE SHEET




Assets

$     393,598

$      390,486

$      348,734

$     341,156

$     330,097

Loans receivable

304,111

298,447

274,131

259,318

253,599

Deposits

308,848

307,585

275,905

267,086

266,906

Loans to deposits

98.5%

97.0%

99.4%

97.1%

95.0%




CAPITAL




Common equity

$       39,756

$        39,238

$        39,066

$       38,432

$       37,939

Total equity to assets

10.10%

10.05%

11.20%

11.27%

11.49%

Tangible common equity to tangible assets

9.62%

9.56%

10.66%

10.72%

10.92%

Tier 1 Leverage Ratio

9.88%

10.36%

10.94%

11.30%

11.32%




PROFITABILITY MEASURES




Interest Income

$         3,905

$          3,796

$          3,515

$         3,464

$         3,357

Interest Expense

603

565

535

537

560

Net Interest Income

$         3,302

$          3,231

$          2,980

$         2,927

$         2,797

Provision for Loan Losses

65

159

190

97

165

Net Interest Income after Provision

$         3,237

$          3,072

$          2,790

$         2,830

$         2,632

Noninterest Income

885

874

1,070

624

1,113

Noninterest Expense

3,645

3,166

3,177

3,167

3,108

Income before Taxes

$            477

$             780

$             683

$            287

$            637

Income Taxes

96

182

171

27

177

Net Income

$            381

$             598

$             512

$            260

$            460

Return on Average Assets

0.39%

0.64%

0.59%

0.31%

0.56%

Return on Average Equity

3.86%

6.11%

5.29%

2.72%

4.90%

Net interest margin

3.70%

3.85%

3.82%

3.92%

3.81%

Yield on earning assets

4.36%

4.50%

4.49%

4.63%

4.56%

Cost of funds

0.69%

0.68%

0.69%

0.74%

0.78%




PER SHARE DATA




Basic Earnings per share (EPS)

$0.08

$0.12

$0.11

$0.05

$0.10

  Average basic shares outstanding

4,809,856

4,818,152

4,818,733

4,818,733

4,817,885

Diluted Earnings per share (EPS)

$0.08

$0.12

$0.11

$0.05

$0.10

  Diluted average shares outstanding

4,821,139

4,825,157

4,828,285

4,836,783

4,827,921

Tangible book value per share

$7.81

$7.68

$7.64

$7.51

$7.41

  Period-end shares outstanding

4,802,856

4,817,856

4,818,733

4,818,733

4,818,733




ASSET QUALITY




Classified assets

$         8,794

$          9,003

$          9,415

$         9,063

$         9,780

Classified assets to Tier 1 capital + ALL

21.03%

21.72%

23.09%

22.61%

24.58%

Non-performing assets (excluding TDR's)

$         5,943

$          4,759

$          5,072

$         4,684

$         5,870

Non-performing assets to total assets

1.51%

1.22%

1.45%

1.37%

1.78%

Net charge-offs

$              23

$             105

$               13

$              74

$            140

Net charge-offs to average loans

0.03%

0.15%

0.02%

0.12%

0.22%

Loan loss reserves to non-performing loans

102.11%

162.86%

141.11%

166.55%

126.50%

Loan Loss Reserve to Loans

1.07%

1.07%

1.15%

1.15%

1.16%